How to Be an Investment Banker?: The banking sector has been one of the best sources of employment for students of finance and commerce in India for the last three decades. With the Indian economy opening up in the 1990s and increase of education and urbanization, the demand for banking services has grown exponentially.
Along with the fast-growing aspirational middle class in the country, there have been increased penetrations of banks and NBFCs into India’s hinterland. The opening up of private banking institutions and embracing digital technology has brought down the percentage of unbanked population in the country drastically which was among the highest in the world only a decade ago.
Table Of Content
- How to Be an Investment Banker?
- Why Investment Banking Is A Lucrative Career Option?
- What Does An Investment Banker Do?
- Where Does An Investment Banker Work?
- Educational Requirements
- Certified Financial PlannerCM (CFP)
- Certified Financial Analyst (CFA)
- Importance Of Internships
- What Are The Salary Trends?
How to Be an Investment Banker?
The banking sector in India offers a variety of job opportunities for individuals with an aptitude for commerce and finance. Bank jobs are suitable for those people who like to work in a traditional, stable and secure environment.
There are a number of banking jobs available today like equity trader, branch manager, bank teller, loan officer, underwriter and credit analyst among others. These traditional roles in the banking industry have seen their heydays and aren’t likely to grow manifold with increased digitization.
One of the roles that are likely to generate maximum employment in the coming years in that of Investment Bankers. It is one of the most talked-about job profiles in India’s banking industry as of now.
As a student of the Commerce Stream or one who is looking for an opportunity in the banking sector, you are likely to have heard about Investment Banking. But there are misconceptions about Investment Bankers.
They aren’t necessarily the witty, suave, jet flying and Lamborghini driving financial advisors as the media tends to often portray them. If you don’t see any of these qualities in yourself and don’t have all the glamor quotient of a Wall Street professional, you can still dream about becoming an investment banker.
Good knack in finance and attention to detail is what’s required for a person to succeed in this role.
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Why Investment Banking Is A Lucrative Career Option?
Yes, the salaries are lucrative and the job role sounds appealing. But there is more to a career in investment banking that is attracting thousands of young Indians to this job.
As the country moves from the era of the controlled business environment to a more competitive free-market era, most people are looking beyond traditional means of savings and investments. Bank deposits and real estate aren’t the best bet for every Indian anymore.
They are looking to diversify their investments and this is where the role of an investment banker is growing in importance. They are sought out by everyone from middle-class working professionals to HNI individuals and institutional investors.
But given the diverse role that Investment bankers have to play in their day to day job it is certainly an increasingly competitive career path, but has equally if not more rewarding and advantageous opportunities.
If you are one who has vague knowledge about the roles and work profile of an investment banker or the educational qualifications required to be one, you are not alone.
It is still a new role in the context of India and here in this write-up, we shall look at all that you need to know about the job profile, qualification, and expected salaries.
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What Does An Investment Banker Do?
The primary job of an investment banker towards his clients, be it an individual, an organization or the government, is to help them wisely and prudently invest their money.
They have to work impartially and judiciously towards raising funds for individuals, organizations and capital markets. They have an intermediary role between different companies that need to raise capital funds, by primarily dispensing securities and working closely with investors who have the mind to provide with money in lieu of certain security and reliability.
Herein the Investment Banker focuses on suggesting the right investment paths to clients based on their goals, the tenure of their investments and risk appetite.
They have an advisory role to play within a company, guiding them towards issuing bonds and stocks. Most clients allow them to buy or sell stocks, bonds and other financial instruments on their behalf because of their incredible knowledge about it.
An investment banker also helps in underwriting, which is a process that allocates securities to various investors. Their advisory role extends to the facilitation of mergers as well as acquisitions.
They relate to both the parties involved in the prospects of possible transactions. It is also their job to locate potential buyers who will help in raising funds for the organizations they work with.
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Where Does An Investment Banker Work?
There are several businesses apart from the traditional banks that have been hiring Investment Bankers. Based on your qualifications and preferences you can choose to work with one of the following businesses –
- Mutual Funds
- Brokerage Firms
- Wealth Management Firms
- Estate Planning Firms
- Brokerage Firms
- Information Technology Firms
Investment banking requires some specific educational qualifications to have a successful career. While the career role is open to most students who take up Commerce and Finance having a bachelor’s degree like BBA in Financial Planning will help in becoming an entry-level analyst. Masters in Financial Planning or Masters in Financial Analysis and other master’s degree will help in reaching the mid-level and senior staff in this career path. These are the courses that most students aspiring to become an Investment Banker opt for. There are dozens of institutes in India that offer these courses. The idea behind choosing a course is to graduate with a specialization in Finance.
However, if you are looking to rise up in the competitive pyramid and work with the top Investment Banking companies in India and abroad there are two courses that you should aim for – Certified Financial Planner (CFP) and Certified Financial Analyst (CFA). These qualifications are rare in India and they are recognized throughout the world. Below are the insights on these programs:
Certified Financial Planner (CFP)
It was one of the most sought after qualifications in the Investment Banking industry. The biggest advantage of this program is the fact that it is globally recognized and allows you to apply for Investment Banking jobs with the top financial intuitions around the world. This is a certification program that is offered by the Certified Financial Planner Board of Standards (CFP Board) based in the United States and few other organizations that have earned the affiliation from the affiliated with Financial Planning Standards Board (FPSB) outside the United States. This is perhaps the most recognized certification program for Investment Bankers with only the best students of finance making the cut and earning their certification.
In India, the certification program is conducted by the Financial Planning Standards Board – India (FPSB). There are several modules in this program and they are:
- Introduction To Financial Planning
- Risk Analysis & Insurance Planning
- Retirement Planning & Employee Benefits
- Investment Planning
- Tax Planning & Estate Planning
- Advanced Financial Planning
With little more than two thousand professionals in India holding a CFP license there is a great demand for candidates with CFP license in the Investment Banking industry. Most students aspiring for this certification take it after their graduation through students who have completed that 10+2 are also eligible for the CFP program. It is mandatory for you to have the NCFM Id which is conferred by NSE Academy.
Certified Financial Analyst (CFA)
This is another globally recognized certification program that gives wings to your career if you are aspiring to be an Investment Banker. This certification program is conducted by the US-based CFA Institute. This is a highly recognized designation in the field of finance and the fact that there are just about 150000 professionals around the world possessing this charter talks about the novelty of this qualification. Top Mutual Funds, Brokerages, Risk Management Firms, etc. are always in the lookout for professionals with the CFA charter.
The CFA Institute in India conducts this CFA Exam. This program covers several modules that will help you in your role as an Investment Banker. These include:
- Ethical and Professional Standards
- Quantitative Methods
- Corporate Finance
- Financial Reporting and Analysis
- Equity Investments
- Alternative Investments
- Portfolio Management & Wealth Planning
Candidates aspiring to earn this charter need to complete their graduation and have a minimum of two years of work experience to sign up for this course. It is a long term program that takes two and a half years to complete the course. There are three levels of the CFA Exam that candidates need to clear to earn their charter.
If you wish to get into a high paying job role in the Investment Banking industry possessing these qualifications will improve your scope. These will help you understand your duties and rewarding career opportunities. If you have already completed your Masters, they are still worth the extra effort as you will be able to earn your charter alongside other courses.
Importance Of Internships
You must engage yourself in internships to get hands-on experience in this field. It will become easier for you to relate to your course when you get to apply theoretical concepts in real-life situations. Internships will help you advance as an investment banker because it will build a solid background for your career. The people you meet during this phase might have a role to play in your future and that is why you must sharpen your networking skills. It is always better to know where your career choice will lead you.
Having practical experience in the real world of finance outside your course books is immensely necessary. You will get the prior knowledge about what skills you need to excel in order to advance in your career. If you leave a good impression in the company you are interning with, you might get offered a job as an analyst right after your graduation. Nonetheless, it will help you prepare for job interviews and the recruiters will automatically get to know you have gained some experience through your internships.
What Are The Salary Trends?
This is perhaps what concerns you the most when we talk about the job of an Investment Banker. Given all the labor and educational qualifications, it takes one to be an Investment Banker in India the salaries are lucrative. The average salary for a fresher in this industry in India is between the 6 and 8 lakh per annum mark with the lower end of the spectrum being close to the 4 lakhs per annum.
Masters in Finance or similar specialization will increase your odds of landing up in a job with a reputable organization. Those who enter into this field with a CFA or CFP qualification can hope to earn in the upward of 10-12 lakhs per annum as their starting salary as financial institutions such as Banks, Mutual Funds and Wealth Management firms are in the lookout for professionals with this rare qualification.
With the demand for Investment Bankers increasing across the board this job profile also offers you good growth opportunities and most Invest Bankers can double their income within 3-5 years. At the top of the pyramid Investment Bankers in India also land up in job roles that pay them in the upward of 10 million rupees annually which is among the highest any person in the financial industry can hope to earn.
As you move up the chain in terms of your experience and professional skills you also have the opportunity or exploring an independent career in this field. Seasoned Investment Bankers often don the role of Wealth Planners working with their clients directly and independently.
To sum up, Investment Banking is one of the most lucrative career options for Indian students in the commerce stream. This industry is expected to grow manifold in India as the economy grows and the percentage of the population in the middle-income group grows in India. If you are interested in a career in the banking industry and love to deal with Finance this is surely one of the sunshine sectors that you can’t take your eyes off.